Tax Preparation Checklists To Help You Get Your Tax Documentation In Order

Schedule C, Self-Employed
Tax Preparation Checklist

For Schedule C tax filing, our self-employed tax preparation checklist will help you make sense of what is needed when tax time comes around.

I can tell you from first hand experience that working for yourself can offer a boatload of gratifying rewards. In fact, if you work from home like I do, there is no doubt that you enjoy your extra short morning commute to work.

A big advantage to being self employed is the variety of tax-deductible items available that can help lower your tax bill. Taking advantage of tax deductions that are available can greatly reduce the amount of taxes owed on self-employment income.

For self employed business owners, deductions are taken on a Schedule C (Profit or Loss From Business), or a Schedule C-EZ (for tax filers with deductions totaling less than $5000).

Self Employed Record-Keeping Checklist

For the self employed, the combination of self-employment taxes and income taxes can easily add up to be the biggest single expense you will face in your annual budget. Taking the time to choose a small business tax software package and keeping detailed records for your income and expenses goes a long way to simplifying the process.

Educating yourself on tax deductions that are available for self-employment is also imperative to good results. This can make a big difference in your year end tax bill, and improve a sole proprietor’s overall profitability in their self employed business practices.

Self Employed Schedule C Checklist

click to print schedule C checklist

Self Employed Income

  • Gross Income
  • List of bank deposits
  • All 1099s
  • Other income (interest etc.)

Adjustable Figures Needed

  • Beginning inventory
  • Ending inventory
  • Bad Debts
  • Auto Expenses / business mileage
    • Auto insurance
    • Interest of auto loan
    • Repairs & maintenance
    • Total miles driven
    • Business miles driven
    • Total gas purchases
    • Date car purchased
    • Model and make of auto
  • Salaries & Wages
    • Total gross wages paid
    • Commissions paid
    • Company paid FICA
    • Federal unemployment paid
    • State unemployment paid
    • Worker’s compensation paid
    • Copies of 1099s to contractors
  • Home Office/Business Expense
    • Total square feet of home
    • Total square feet of office
    • Mortgage interest
    • Real estate taxes
    • Home Utilities
    • Home repairs
    • Home insurance
    • Repairs/Maintenance Done in Year
    • Month/Year Home First Used for Bus.
    • Your Investment in Home
    • Purchase price + improvements
    • Daycare Use
    • Total Hours used for Daycare
  • List of assets (cost & date acquired)
  • Cost of inventory items that sold (do not include unsold inventory)
  • Donated inventory - special rules apply
  • Depreciation on the cost of furniture and equipment that you owned prior to starting your business, desks, computers, file cabinets, etc.

Self Employed Expenses

  • Advertising
  • Commissions paid
  • Contract Labor
  • Business loan interest
  • Cost of good sold
  • Health insurance premiums
    • Special rules apply. (Deduct on the front of Form 1040.)
  • Insurance (other than health)
    • Business Liability
    • Workman's Comp
  • Legal and Professional Fees
    • Accounting
  • Meals & Entertainment (usually only 50% deductible)
  • Education & Seminars (related to current business, not new career)
  • Merchant fees for your credit card sales
  • Bank service charges
  • Office Expenses
    • Materials & Supplies
      • Postage and shipping
      • Customer gifts
      • Software purchases
      • Software subscriptions, such as security software
    • Dues & subscriptions
    • Internet service
    • Web site hosting, design, and domain registration
    • Cell Phones
    • Telephone
    • Long distance phone charges
    • Phone cards for business calls
    • Books, newspapers, magazines for business purposes
    • Answering services
  • Rent/Lease Business Space / Property
  • Business Property Taxes
  • Rent/Lease Business Equipment
  • Rent or lease of storage facilities
  • Repairs and Maintenance of equipment or business space
  • Shop supplies
  • Taxes & Licenses
  • Travel expenses
    • Parking and tolls for business travel
    • Hotel, air and bus fares, taxis
  • Utilities
  • Bank charges
  • Equipment purchases - These can be generally depreciated or expensed with a Section 179 tax deduction
  • Association and membership fees


Deductible Self-Employed Expenses

Generally, any purchases made specifically for your business should be deductible. Items used for both personal and business purposes should be kept track of in a journal or other method to record what percentage of the expense is used for business.

Using your Home for Business

Business use of your home allows you to deduct a percentage of the costs involved in owning or renting your home. Determine the percentage of your home that is being used "exclusively" for your business to determine you deduction. (Note: daycare businesses will use a formula based on the number of hours they make the home available to the children.)

Use Form 8829 to calculate and report your home business deduction for use of your home.

Home Business Deductions May Include:

  • Depreciation, based on actual purchase and remodeling costs
  • Rent, if you are renting your place of residence
  • Mortgage interest, real property taxes, PMI insurance
  • Utilities, such as gas, electric, water, sewer, etc.
  • Trash service, pest control service
  • Homeowners or renters insurance
  • Regular maintenance of your home

Business Use of Your Personal Vehicles

To deduct business use of your vehicle you must keep a record of your business mileage to substantiate the deduction.

Standard Mileage Deduction

The business mileage for deduction for non-home based businesses does NOT allow you to take a deduction for the mileage from your home to your principal place of business. Any other business related mileage should be deductible. The standard mileage deduction allows you to deduct the business portion for license plates, taxes, and interest the vehicle loan.

Deducting Actual Vehicle Expenses

Deductible expenses include:

  • Depreciation of the purchase price for the vehicle
  • Vehicle loan interest
  • Auto license plate fees and taxes
  • Repairs and Maintenance
  • Insurance
  • Interest
  • Fuel

Deducting Self-Employed Health Insurance

You may qualify to take a deduction for self-employed health insurance on the front of Form 1040, Line 29. Basically if you purchase your own insurance, this allows a full deduction for the cost for your health insurance premiums. You cannot take this deduction for months you were eligible to be covered by an employers' health insurance plan. See IRS Publication 502 for more details.